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On the Formation of Interaction Networks in Social Coordination Games

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  • Matthew O. Jackson

    (California Technical Institute)

  • Alison Watts

    (Vanderbilt University)

Abstract

There are many situations where two interacting individuals can benefit from coordinating their actions. We examine the endogenous choice of partners in such social coordination games and the implications for resulting play. We model the interaction pattern as a network where individuals periodically have the discretion to add or sever links to other players. A player chooses whether to add or sever a link based on the (prospective) partner's past behavior. With such endogenous interaction patterns we see multiple stochastically stable states of play, including some that involve play of equilibria in the coordination game that are neither efficient nor risk dominant.

Suggested Citation

  • Matthew O. Jackson & Alison Watts, 2000. "On the Formation of Interaction Networks in Social Coordination Games," Econometric Society World Congress 2000 Contributed Papers 0778, Econometric Society.
    • Handle: RePEc:ecm:wc2000:0778
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